Quality Factors

Return on Equity (ROE)

High Return on Equity (ROE) characterize growth companies. It measures the company's profitable, i.e. how much net income it is able to generate on the money its shareholders invested.

Formula:

ROE = Net Income Common Shareholders Equity

Please note that we don't remove the extraordinary items from the net income. It's very rare that transactions meet the requirements to be presented as an extraordinary item. For this reason, the concept extraordinary items has been removed from GAAP (starting from Dec 15, 2015). For more information, click here.